In March 2008, Pakatan Rakyat was swept to power in Penang by the political tsunami of the 12th general election. For the PR state government led by DAP’s secretary-general Lim Guan Eng, it was sink or swim. Today, just over 30 months later, many observers would say that the PR has come a long way.
But as Lim would tell you, the going has not been easy — he and his team of PR leaders have had their fair share of brickbats regardless of which corner they turned.
Every action or decision by the state government has come under close scrutiny. Some decisions have even prompted certain groups to take to the streets to demonstrate. Besides governing, Lim and his team have also had to deflect allegations — many of which have been racial and religious in nature — hurled at them.
The Edge Financial Daily caught up with the Chief Minister in between his busy schedule at his office at Komtar recently to talk about his expectations and plans for Penang. The following is an excerpt of the interview.
TEFD: What are the critical inputs needed for the next phase of Penang’s growth and how will the state address these needs?
Lim: Human talent is our critical input and we need to join the race to the top, not to the bottom. Nowadays companies go where the talents are. We are attuned to the demands of the corporate sector and that is why we are trying to turn the collosus of goverment to make it lean and mean and results-oriented. It is not easy, but you can see results happening in Penang which you don’t see in other states.
That is why people are looking at Penang. It is pointless to have the most intelligent people if the government is stupid. That’s where you’ll have brain drain. The government must also be as smart as the people and must not fear the best.
You mentioned previously that Penang has turned down FDI because it did not have the required talent. How successful has the state been in luring back Malaysians working overseas?
I just visited Xiamen (in China) and met a businessman from here who is establishing a plant there because he could not find sufficient engineers in Penang. He had to go to China because there were not enough electrical and electronics engineers here. First of all, he could not afford the rates required to woo them back from abroad. While we do not reject investments, we will not promise something we cannot deliver because we think honesty is the best policy and it creates confidence in the government among investors.
I had to refuse an investment worth billions of dollars as they wanted me to guarantee that I could provide them 1,000 engineers. I refused to do that, so they did not invest here. If I had guaranteed that and if I can’t deliver, I would have ended up paying billions in compensation as we would not have been able to supply so many engineers.
No matter what the opposition says, they cannot guarantee the engineers as we are already facing a shortage of E&E engineers. I don’t think there is a severe shortage elsewhere but it’s acute in Penang and there must be something done about it.
As for attracting the Penang diaspora back, they are willing to look in Penang as they are now having a favourable opinion. Some have started to come but it has not reached tipping point and we have to keep improving ourselves, especially the infrastructure, good governance, good international benchmarks and settings. Then people will follow on their own accord. So I think we’re moving in the right direction, transforming Penang to become an international city. That is our vision, but it is for the long term and it cannot be done overnight.
We are looking for high technology, high value-added and knowledge-intensive investments and it is not only the quantity but quality that is important. We are looking for quality investments. We have set ourselves a high target of RM4.2 billion this year but so far, we have only achieved RM1.5 billion. But we are working doubly hard to achieve our target.
With the electrical and electronics sector in Penang losing some of its shine, what do you see as the next economic sector that will drive the state’s economy?
I don’t think that we have lost our shine. We are only giving it a different shine, instead of emitting just one light, we are emitting a rainbow of colours, to show the diversity of the technologies available in the different sectors. It is not only to optimise our resources and capacities but also to move up to the next level of technology. We are still No 1 in LED, and have new industries like St Jude Medical and biotechnology companies coming in.
The Penang Science Council is going to set up the Penang Tech Centre which will be the bridge between maximising and optimising existing resources and moving up to the next technological level.
We have to go back to our core competencies. This is our strength and we have to utilise and specialise based on our strength. Though other industries like biotech are coming in, we will still rely on our core competencies.
Don’t forget we have 40 years of experience and our supply chain management is second to none worldwide. We also have to work on tourism.
Over the last six months, tourist arrivals went up by 40%. Most importantly, we are getting our act together. We started from scratch as we had to set up the Penang Global Tourism Centre, due to lack of help from the federal agencies. I believe we need to drive people to get the machinery going and I am confident we will get there. If you get the right people and give them the right tools, and the timing is right, they will bring the right results.
What steps are being taken to put Penang back on the international tourism map?
Despite the limitations and constraints, we have made progress… and we are continuing to improve infrastructure, publicity and promotion campaigns. We must get our basics right, namely cleanliness, [eradicating] crime and corruption and I think we are making progress there.
What needs to be done to make Penang more liveable and economically dynamic so as to make it a destination of choice for investment and talent?
We must be more international and must accept and attain international benchmarks so that Penang is not only a location of choice for investors, tourists, but also a habitat of choice for those who desire sustainable living. You have to attain international standards, that’s why we want to attain the status as the first green state and WiFi state, as well as the first corruption-free state in the country, which we have already achieved. Transparency International gave us the commendation… it is not easy to obtain a budget surplus but we have done it.
How have the Unesco heritage site guidelines impacted businesses in the state?
We have attained recognition internationally, even though we had to clean up a lot of excesses and the mess left to us. Just like the four projects which were approved under the guidelines by the previous government which we had no knowledge of, but we dealt with it by insisting on compliance.
I would say that we still want to be the best international role model even though we are still some way off. We have in place the heritage office, we have the people there doing their job and of course we can do very much better, but we are making progress. We also have to find our own funds as federal funds have not been forthcoming. The state government will provide necessary funding wherever we can. It is going on well under these circumstances even though it could go better with funds.
The guidelines have impacted businesses negatively but on the whole, in the long run, it will be positive for Penang even though those who bought properties say they are subject to limitations and constraints and it doesn’t make their properties viable because there are no returns. You must have deep pockets and those without will be left high and dry because banks won’t fund you as the rate of return and gestation period is too long. But if you have deep pockets it is all right as the value of properties will rise.
What measures have been taken in the last two years to facilitate the business environment in Penang?
Transparency, integrity and corruption-free. Most businessmen say no one dares ask for money these days, many of them even refuse lunch offers as they are scared. We have cut out the bureaucracy and inefficiencies and things move fast. This has given confidence. Our efforts to attract investors with our ‘build first, approve later’ for big investments has also allowed them to speed it up, as time is of the essence. The accessibility of public servants with this administration is also something new. Anyone can see me anytime, so we can cut through the red tape and solve problems.
Hiccups continue to interrupt federal funding for Penang’s development, such as the role of federal-appointed commissioners in channelling funds to Pakatan-held constituencies. What is the way forward to address this problem?
This is the problem when you have a feudal mentality… There must be a shift from a feudal mindset to a progressive mindset to welcome change, so you can embrace globalisation. You must embrace change… If you cannot embrace change you cannot move forward. A very good analogy I always draw is, if you want to turn the ship, you can’t turn it immediately, you have to move forward then only the ship can turn.
There are still some, not that many, forward-looking civil servants who know that by cutting down the funds, they are cutting off their noses to spite their faces. You think by holding back Penang, Malaysia can move forward? No, Malaysia will go backwards. Don’t forget we contribute one-third of Malaysia’s exports and by pulling Penang back, you’re pulling Malaysia backwards while other countries are forging ahead. If it still has a feudal mindset, the government’s transformation programme will all be humbug. How can you expect people who cause problems of inertia to be forward-looking? Don’t use the same solutions to treat new problems, just like using the same person who has failed is also insanity.
You… must keep hammering for a win-win solution, like MIDA and Mustapa (Minister of International Trade and Industry Datuk Seri Mustapa Mohamed) — they listen because they know it benefits Malaysia in the end. There are actually many good civil servants, not all are feudal but we must punish the bad and reward the good so you can get maximum results. If you don’t, they will run riot and spoil the whole basket of apples.
What have been your biggest challenges since Pakatan Rakyat took over the state government in 2008?
On the whole, over the past 2.5 years, the going has been tough and will only get tougher, especially if you want to bring about a mindset change. The hardest part is not the infrastructure but keeping the maintenance culture, and not just to get results but to bring about a mindset change. We have made honest mistakes along the way. I would be the first to admit that, and we backtrack and correct and improve. I don’t claim to be perfect, but what I will always say is this, ‘I would rather fail trying than to fail to try’.
What about the perception that the Barisan Nasional will not be able to regain Penang in the near future?
The battle for us will still be tough. We have to make sure we deliver and let the people decide. There are no guaranteed victories, and I am not going to fall into trap, especially with some BN parties saying it would be tough to regain Penang. This is their sandiwara and let them play it. After all, they say different things to different audiences, even with the media, so it is part of their shadow play. I am going to ignore it and focus on doing my job and establish the first people-centric government of Malaysia, a government that takes care of its people. It is going to take some time, and we have to convince the people that it is worth taking this path. It is not going to be easy but what we want to do is make sure everyone shares in the burdens so we can enjoy the fruits of success together.
Penangites know we work hard and we are doing our best. They know we have the best interests of Penang and the people at heart and we are trying to create history not only in Penang but Malaysia. Finally, as I said, let Penang be a beacon of hope for democracy, freedom, excellence and performance. We have established the Speakers Square and people are coming from all over. We should feel proud as it shows our maturity and ability to discuss any issue. We have come a long way in the last two years, but I think there is so much more to do, so (much) further to go for Penang.
With the Economic Transformation Programme, how does Penang hope to benefit seeing that two of the National Key Result Areas laid down in the 10th Malaysia Plan are tourism, and electrical and electronics?
We must take into consideration that Penang is already a brand. If you want to create a brand, it takes a long time, so we are leveraging on the existing brand of Penang and working very hard on the branding. That is why we say resources for tourism should be put in and when you get all the benefits, you can go to the other areas. After all, the tax receipts are collected by the federal government. The state government does not get a single sen. If you want to have balanced growth, you should not be cutting off your nose to spite your face. We should be focusing on performance, not political partisanship and we should be focusing on results.
Look at tourism, Penang generates 70% of the receipts for health tourism and in terms of electronics and electrical exports, Penang accounts for 57%. One-third of the nation’s exports are from Penang. These are huge numbers.
That is why the federal government should invest in areas where you have natural growth patterns so you can maximise your outputs. If you do not do that, you won’t get the necessary receipts to ensure balanced development.
Whether you like it or not, the global trend is towards cities, so you must develop cities. With the George Town conurbation, our logistics hub, human talent, and very importantly, supply chain management, good governance and effective leadership are very strong points for a liveable city.
This article appeared in The Edge Financial Daily, October 4, 2010.